Side by Side Duplex Fix & Flip, Rockland, MA

[Charlie MacPherson]

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Rockland.

Purchase price: $284,000
Cash invested: $1
Sale price: $430,000

Front/back duplex, purchased as an assignment from a REO sale. Property had been abandoned for at least 2 years. Had a lot of cleanup to do, utilities were shut off and the basement flooded to about a foot deep just days after closing. Fun times!

Overall, it was successful - and I'm looking for my next!

What made you interested in investing in this type of deal?

Looking to get my first fix & flip under my belt. I knew the numbers would work on this one and it proved me right!

How did you find this deal and how did you negotiate it?

I found this deal through a middle man. The seller had it under contract with BofA as an REO. We cheerfully paid both party's fees as the numbers still worked.

How did you finance this deal?

I brought a private lender to the table. 100% financing, 0 points.

How did you add value to the deal?

I served as the Realtor and although I lack contracting skills, I handled a lot of the scut work. I also found the buyers and was able to represent both sides by means of a disclosed dual agency.

What was the outcome?

We made a decent profit!

Lessons learned? Challenges?

Big lesson #1. My partner and I did the deal on a handshake. He later wanted to renegotiate the deal. A contract would have solved that issue without hard feelings.

Big lesson #2. My partner was the contractor. We did not make any provisions for him to earn income during the flip, so he had to work a few other jobs to keep food on his table, so the project took FAR longer than it should have. Next time, he should earn part of his split during the flip so he can work on our project only.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My private lender has asked to remain anonymous, but the Realtor (me) was outstanding! :-)